Lev Raises $10 Million Seed Round to Build the Future of Commercial Real Estate Transactions

The Lev team and I are extremely excited to share that we have raised a $10 million Seed round from NFX, Caanan Partners, and JLL Spark, the strategic investment arm of commercial real estate services firm JLL, as well as our existing investors, ANIMO Ventures and Ludlow Ventures.

Lev is the online platform for commercial real estate transactions. We closed over $100 million of transactions during our first year of existence and are tracking to 10x that volume this year. We help commercial real estate owners and investors get the best financing for their property, using proprietary data and process automation tools to build the most competitive capital stack, quickly and easily. 

Ten years ago, the seminal essay, Software is Eating the World was published. Ever since then (and perhaps even before) industry experts have argued that their industry was the exception to being disrupted by software. They believe that their jobs were too complex to be automated or to be “eaten” by technology. The thing that is overlooked by those holding to this idea is that software is no longer a component of the business, but it is the platform and layer on which everything else runs. The examples Marc provided ten years ago across airlines, logistics, and more have expanded across the entire economy. Lev is bringing that same level of innovation to commercial real estate transactions.  

We are using the funding and support from this round to focus on hiring more incredible Levers to join our team in order to further invest in our technology, partnerships and customer acquisition. 

To that end, I thought it would be a good time to share with you all our vision for Lev. In this post, I'm going to highlight:

• How we got here
• Our perspective on the commercial real estate market 
• Our vision of the future
• Why we’re positioned for success
• The next chapter for Lev

How we got here

Lev started with my experience buying our first home with my wife in Brookline, Massachusetts in 2016. We went through an entire mortgage process, only to be "left at the altar" a few days before we were supposed to close. I was so frustrated that I got a mortgage originator license that week. Surely I could do it better! I even had hopes of starting an online mortgage company before realizing that with all the growth happening at my current company, Dispatch, it just wasn't practical to try and start another business.

In 2018, my wife and I had moved to NYC, and I helped an organization I'm passionate about, Chabad House Bowery, refinance their building. I went through the process with a friend who worked at a large commercial mortgage brokerage. He was great at his job and we still spent months of effort and hundreds of emails to get the deal done.

After selling Dispatch to Vista Equity Partners and spending an incredible year there, I was itching to start something new. I realized that there was a huge opportunity in rebuilding that arduous email, fax, and phone call-filled commercial mortgage transaction. It took over 600 emails and dozens of hours for a relatively small deal, and after all of that, if you had to reference something on the loan docs, good luck! There had to be a better way. Companies like Rocket Mortgage, Better.com and Blend had shown that software could dramatically improve residential mortgages, why were commercial mortgages left in the dust? 

So, I decided to build Lev. We would use technology to fix this broken, frustrating, and expensive process.

Sammy, my co-founder, and I launched the company in late 2019 and began working on transactions. We had the backing and support of incredible groups early on, including Nico & Tono from ANIMO Ventures and Jonathon, Brett and Blake from Ludlow Ventures. With the help of our incredible angel investors and advisors, we kicked off the new year with an amazing pipeline, a talented team, and a powerful set of technologies.

2020 was not what we expected. Just a few months into building the business lenders began cutting off lending due to COVID. It was rough. I was in crisis mode and explored all options for the business. We decided that just as the others would start to shrink, we had an opportunity to grow. “Never waste a good crisis,” they say. We doubled down.

Despite the rocky start, 2020 ended up being an incredible year for the business. In our first calendar year, we closed $100 million of loans against the backdrop of a devastating global pandemic. More importantly than the loan dollars, we learned a lot. 

Towards the end of the year, Sammy introduced me to Justin Piasecki. In our conversations, it became clear that he was a rare breed: An incredibly successful CRE capital markets professional, who is humble, realistic, and future-driven. I knew we had to work together. He joined us in January. 

We had assembled an unparalleled team that held deep industry expertise, built technologies that brought something wholly new to the market, and seen enough traction to make it clear that the market was ready. It was time for our next phase of growth.

Our perspective on the Commercial Real Estate Finance (CREF) market

The world of commercial real estate is vast and complex. Everything from apartment buildings to warehouses are considered commercial real estate. There are over $3.5 trillion worth of commercial mortgages outstanding in the US.

Over the past ten years, commercial real estate finance has shifted dramatically. As banking regulations tightened, the world of private lending and alternative financing sources has grown, as have the number of paths available to a CRE owner managing a portfolio of assets. For example, small and mid-sized banks have been taking over share from a market once dominated by large banks, growing their portfolios at 4x the speed of their larger competitors.

To sort through all of the confusion, more and more borrowers are using brokers and advisors to help them identify and negotiate the best structure for their capital stack. With commercial real estate debt growing for 33 consecutive quarters to over, the portion of transactions that flow through intermediaries has continued to grow. 

A view of growth in commercial mortgage originations and originations by brokers over time based on data by Mortgage Bankers Association.

Simultaneously, most incumbent players are becoming more biased rather than becoming more impartial. As of 2021, of the top ten CRE financing brokerages by dollar volume, 90% also own their own financing businesses. In residential mortgages, this is not allowed -- you are either a broker or a lender -- but in CREF, it is.

Furthermore, CRE investors are looking for more from their brokers. They are no longer interested in hiring a middleman to just make a couple of calls or (barely) clean up a financial model on their behalf. Since the advisors are no longer trusted, the days of lenders only working through trusted intermediaries are long gone. The world where a broker can get you a better rate from the same lender than going direct has been completely flipped on its head. If a broker is just playing telephone in a crowded transaction, it is hard to justify the expense.

Our vision of the future

Through the power of accurate, real-time data and incredible machine learning technologies, Lev’s clients can make more money with less work. We can use these tools — along with our team of human experts — to serve as the capital markets arm and partner for the tens of thousands of commercial real estate investors operating across the country. 

Since starting Lev, it has become clear to us that the financing is not only a critical component in CRE in order to maximize investor returns, but it is also the center of an entire series of CRE transactions. 

On acquisitions, the financing is often the step that defines closing timeline, influences and works with the title company, accrues legal fees and more. After the acquisition financing, there’s usually a refinance every five years. 

Active CRE investors are always working on — or are about to work on — financing an asset. They call their capital markets representative before and after looking at a potential acquisition to see what’s possible and they brainstorm opportunities to improve returns.

The best capital markets advisors have a pulse on the market and the needs of each of their clients. Our goal is to help those advisors be better, free them of the shackles of busywork, and empower them with instant insights, tailored to them and their clients, providing opportunities to help before they’re even asked. We want to digitize the transaction while being conscious that you can’t digitize the relationship. 

Having a trusted resource and partner who is proactive and accurate serves as a competitive advantage for sponsors — that’s what our technology and infrastructure enables.  

Through our existing partnerships and new ones to come, we will become proactive supporters of our clients, adding value to their portfolios and helping them perform better. We will evolve the role of a capital markets advisor into what it really should be: an expert advisor with your best interests in mind, always a step ahead.

It is also important to note that we believe, even in the long-term, that humans will be critical to the process. 

We anticipate that “simpler” transactions (a factor of asset type, loan type, and loan size) will be more automated more quickly. The more complex deals, with multiple layers of debt and equity, will be supported by the tools we are building, so that an advisor can analyze thousands of potential financing structures in less time than it would take for an incumbent to analyze one. 

The platform at Lev will be strengthened by the network effects of each client and lender we work with. As we develop more tools to automate transactions and enable direct integrations with our lending partners, we’ll be able to drive valuable insights into the portfolios of our clients and help them make more money. We believe this cycle will continue to feed itself on both lender adoption and client engagement for many years to come. 

Why we’re positioned for success

Our Traction

As I’ve mentioned, the world of commercial real estate is vast and complex. There is not a single company that serves the entire stack of offerings, but rather an assemblage of thousands of groups that come together to make this industry spin.

Over the past year and a half, we’ve had the pleasure to start working with, and in some cases establishing formal partnerships with, thousands of these incredible companies. They range the gamut from technology startups offering brand new ways to appraise properties to publicly traded, global real estate brands established two centuries ago. 

We look at Lev as an open platform, available for partners in the industry to build with and on top of. We are excited that much of this is already in progress with many lenders and other partners who have been so collaborative to date. 

Our Team

Every single person on our team has been critical to helping us start and grow this business, and there is nothing I am more proud of than the group we’ve assembled here. We are big believers in the idea of “10x employees” and “stunning colleagues,” and I am honored to be surrounded by a group of them. I won’t name them all, but you can meet them here. Or, even better, you can try to join them here.

A company is just a group of people who decide that they want to get something done together. We have a lot that we want to get done, and we have quite a collection of people who are helping us do it. If you work in CRE and are sick of banging your head against antiquated processes “because that’s how we do it here,” please ping me. We’re hiring. 

Our Investors

I’m incredibly excited to share a roster of investors who are helping us realize this vision. Our latest financing, a $10 million Seed round, will set us up with the money and ecosystem we need to build the next phase of Lev.

We’ve been able to assemble a group of real estate technology professionals, with experience building the waves of online real estate transactions to date. We’re excited to have the likes of Pete Flint of NFX (who founded and was CEO of Trulia) & Rich Boyle from Canaan Partners (the former CEO of LoopNet through IPO and acquisition by CoStar), each of whom effectively invented online real estate listings and transactions. We’re also excited about having industry leaders such as JLL, a world leader in real estate services.

The Next Chapter of Lev

As I mentioned at the top, we are focused on bringing on the most incredible engineering, product and capital markets talent to the team at Lev. If you’ve worked on technologies around real-time pricing for capital markets or real estate, underwriting engines, digital transaction closings or complex marketplaces, we’d love to speak with you. 

Finally, I want to express my appreciation once again, to all of you. Our partners, customers, team, investors — thank you. I also want to make a special mention about three members of our team: Sammy Greenwall, my cofounder and friend who puts his heart into making himself and the company better every single day, Avi Goldberg, my Dispatch cofounder-turned-mentor and closest friend, who has taught me so much, looked out for me always and helps me improve in every conversation, and my life cofounder, my incredible wife, Dassi.

If you’d like to be kept up to date on what we’re up to, please connect on LinkedIn and subscribe to email updates here. If you think you can help us build, apply for a role here or message directly.